Forum Journal & Forum Focus

The Oversimplification of Gentrification

The story is told of the British mathematician and philosopher Alfred North Whitehead, that he had a favorite pair of socks. Whenever the socks got a hole in them he had them darned. Then after years of wearing the socks, of getting holes in the socks, and of darning the holes, he asked himself, “Are these still the socks that used to be my favorites?” I would suggest that when we begin to ask ourselves about “gentrification” we are really asking ourselves, “Is this still the neighborhood that used to be my favorite?” It’s in the same location, within the same city, crossed by the same streets, and made up of mostly the same buildings. But is it the same neighborhood?

Gentrification means change, and I use the word “change” very consciously. Because often when we shout against “gentrification” we are really shouting against change. But a shout against change is a hollow shout of foolishness. There will be change. There is no neighborhood that is static -- it is getting better or it is getting worse.

But “change” and “progress” are not necessarily synonyms. Change that is so rapid, change that is so dramatic in scale, change that so mutates the physical character and the human character of the neighborhood that it creates a widely felt damage to the sense of community is a form of change that does not constitute progress. We need to have change in our neighborhoods, but we also need the time for adaptation and evolution.

I have not yet defined “gentrification.” I have deferred that because I think there are lots of times when we yell “gentrification” but we really mean something else.

And all too often “gentrification” is simply a code word for “not like us.” Chinese moving into an Italian neighborhood, Hispanics moving into Jewish enclaves, Koreans opening shops in African-American neighborhoods, Vietnamese businesses in Latino neighborhoods, Mexicans coming into Puerto Rican districts, gays moving into blue-collar family neighborhoods, middle-class blacks moving into poor black neighborhoods. All of these called by someone “gentrification.” I’m more than a little troubled by that. Our calls for diversity and tolerance are diminished when we apply them to others’ neighborhoods but not to our own. And legitimate concerns about gentrification are debased when the term is loosely and erroneously used to mean only that “newcomers are buying houses and they don’t look like us.”

In more and more places, when a strategy of revitalizing older and historic neighborhoods is advocated, this issue of gentrification emerges. But the word itself -- gentrification -- has become so loaded with economic, social, cultural, and often racial overtones that rational, reasoned discussion is often simply not possible. To some people gentrification means new investment, homeownership, neighborhood stabilization. To others, gentrification means loss of affordable housing and a revitalization of the physical character of a neighborhood at the expense of the human character.

So perhaps it makes sense to step back from the word itself and look more closely at the change that can take place in neighborhoods, the role historic preservation may play in that change, and the positive aspects and the potential negative consequences of the change.

The Positive and Negative Aspects of Change

Almost by definition, gentrification results in a number of outcomes encouraged by public policy, including:

reinvestment

increased levels of home ownership

improved public services

improved commercial activities

renovation of vacant and abandoned properties

adaptive use of “white elephant” structures

increased property tax, sales tax, and income tax revenues

neighborhood jobs

property value appreciation

economic integration

But if those are the positive consequences, what are the negative consequences of gentrification -- at least negative for some?

rising rents

rapidly rising property taxes

potential change in the human character of the neighborhood

loss of sense of “power” and “ownership” by long-term residents

potential conflicts in priorities between new residents and long-term residents

In short, to be “for” or “against” gentrification obscures the issues. Reinvestment and economic integration are positive results and should be public policy priorities. Economic displacement is a negative result, and public policy tools are needed to mitigate it.

Addressing Displacement

The most significant adverse impact of “gentrification” is the displacement of residents of modest means. This affects both renters and homeowners. Renters are affected when rents rise beyond what they can afford. Homeowners are potentially displaced when the property taxes on their home rise beyond their ability to pay.

Both forms of displacement, of course, need to be addressed. Neighborhoods are not just about buildings. Neighborhoods are about people, including, perhaps especially, long-term residents. The economic benefits of gentrification are significantly diminished if there is no response to the human dislocation. Further, for many newcomers to the neighborhood, the diversity is often one of the main attractions. To eliminate that diversity -- economic, racial, cultural, and social -- is to diminish one of the valuable attributes of the neighborhood itself.

On the other hand, if the issue of gentrification -- and its most negative side, displacement -- is to be rationally addressed, other realities need to be acknowledged.

1. Not all departure is displacement. In every neighborhood at every socio-economic level there is a natural turnover of residents. To make a cause-and-effect assumption that every relocation happened because “the rents became too high so they had to move out” is to ignore the reality of the transient nature of American households of every type.

2. Some economic displacement occurs regardless of rent levels. Unfortunately, for those least economically fortunate, fortunate, if there is no money on the first of the month, the rent cannot be paid whether that rent is $100 or $2,000. The sad evidence of that is the sizable amount of resident turnover in even the most economically troubled (and lowest rent) neighborhoods. This is in no way to suggest that the “no money to pay the rent” problem is acceptable; it surely is not. Rather it is stated to recognize that there is economic displacement in every neighborhood.

3. Some departure from neighborhoods by long-time homeowners is a rational (and often happy) economic choice. After struggling to make mortgage payments for 30 years and seeing signs of neighborhood decline and sometimes sinking property values, a change occurs and all of a sudden the primary family asset -- the house -- can be sold for more money than was ever imagined. It hardly should be considered a social ill that longtime homeowners of modest means are economically rewarded for their investment.

4. Most of the time the case about displacement is made on an anecdotal basis, not through systematic evaluation of the reality. Recently a New York City housing advocacy group conducted an in-depth analysis of the gentrification issue. Here, in part, was what it found:

Low-income households actually seem less likely to move from gentrifying neighborhoods than from other communities. Improving housing and neighborhood conditions appear to encourage the housing stability of low-income households to the degree that they more than offset any dislocation resulting from rising rents. (Source: The Urban Prospect, “Gentrification and Displacement,” (Citizen’s Planning and Housing Council), Vol. 8, No. 1, January/ February 2002)

5. For those homeowners who are potentially displaced because of rising property taxes, it needs to be recognized that theirs is a cash-flow problem, not a wealth problem. The family economic equity is growing; there just is not enough current cash coming in (a problem particularly with older homeowners living on fixed income retirement payments) to be able to afford the annual outlay of increased taxes. This problem can be easily addressed, and programs are needed to do so.

6. At least in the early stages much of the “gentrification” is movement into vacant properties. Except for the occasional drug dealer or prostitute squatter there is no displacement in the reoccupation of a vacant structure.

Diversity a Key to Healthy Neighborhoods

Now I’d like you to think for a minute about the qualities of a healthy neighborhood. My guess is that your list includes things like good schools, safe streets, no potholes, nearby commercial district with a wide variety of goods and services, safe places for children to play, excellent public services such as trash collection and public facilities maintenance, few vacant structures, clean streets and sidewalks.

Now I want you to try to identify a neighborhood that is all poor and yet has all of those characteristics -- or even most of them. Neighborhoods that are all poor are not healthy neighborhoods by any standard. We need economically integrated neighborhoods.

And if middle-class flight from the city was a bad thing -- and who in their right mind would suggest it wasn’t -- how can the return of those middle-class households not ultimately be a good thing?

While there is not much national consensus on overall urban policy, there is broad agreement on one conclusion: Cities would be healthier if the diversity of the city as a whole was reflected at the neighborhood level. Cities would be healthier if citizens with a range of incomes, races, occupations, and educations lived side-by-side as neighbors. But research across urban areas indicates that is typically not the case, that at the neighborhood level most neighborhoods are essentially all white or all black (or all Asian or all Hispanic); all rich or all poor; all blue collar or all white collar. Nearly 40 years after the passage of fair housing laws, most neighborhoods in most American cities are essentially still segregated by income, race, occupation, and education.

But the exception, in study after study, is found in local historic districts. If having diverse neighborhoods is a public policy goal, it is in historic districts (and almost exclusively in historic districts) where that is taking place.

A couple of years ago the Department of Housing and Urban Development (HUD) hired some academics to look around America and try to determine if there were such a thing as a neighborhood that maintained economic and racial diversity over several years. And they found several such neighborhoods, in fact, and wrote case studies about them. When I was reading the case studies I thought, “These certainly sound familiar.” So I checked -- nearly all of them are historic districts. Did these researchers recognize that? No! The fact that the common denominator of these diverse neighborhoods was that they were historic eluded these august scholars.

Gentrification and Historic Districts

Why are new residents attracted to historic neighborhoods? People of all incomes, races, educational levels, and occupations are attracted to historic neighborhoods for multiple reasons: the quality of the building stock; the character of the neighborhoods; the diversity; the urbanity; the proximity to work, school, shopping, and transportation; the affordability; the range of housing options; and the pedestrian orientation of the neighborhood. In short, people want to come to historic neighborhoods because they are great neighborhoods.

I certainly acknowledge that there is gentrification in historic districts but is historic designation the cause? The underlying causes of gentrification are long-term economic and market forces. While some would like to make the case that historic designation is the direct cause of gentrification, that relationship often confuses cause and effect. A great neighborhood is in high demand. It is not the historic designation that makes it a great neighborhood; it’s already a great (or potentially great) neighborhood. Historic designation is 1) the recognition of the neighborhood quality, and 2) one of the few tools available that assures it will stay that way.

There is one direct relationship between local historic districts and property values, however. In most studies that have been conducted around the country, property values within historic districts tend to have rates of appreciation greater than the overall local market. This is attributable not just to the quality of the housing stock but also the owner confidence that the character of the neighborhood will be protected through the historic preservation ordinance. Real estate values come largely not from within the boundaries of a single property but from the larger context within which the individual property exists (hence the old cliché of location, location, location). A local historic district protects the context of the neighborhood, and thus protects the major source of the value of an individual property.

What is insufficiently recognized is the role local historic district designation plays in preserving more affordable housing through the prohibition of “tear downs” in historic neighborhoods. In “hot neighborhoods” in many cities, smaller houses are snatched up, demolished, and replaced by “McMansions,” a permanent replacement of the more affordable with the never affordable.

Affordable Housing and Historic Preservation

The shortage of affordable housing and what the Urban Land Institute calls workforce housing is becoming increasingly critical. Access to affordable housing has rapidly moved from being a social service issue to being an economic development issue. Of the next 10 million jobs that are created in America, 3.4 million of them are going to pay less than $20,000 per year. That includes daycare workers, teachers’ aides, waiters and waitresses, janitors, security guards, nurses’ aides, retail clerks, and on and on and on. Our society simply cannot function without those workers, and firms cannot prosper without employees. But if housing isn’t available, then employees aren’t available.

There is a real estate fact of life that you cannot build new and rent cheap -- it cannot be done unless there are very deep public subsidies or there is very low quality (and, therefore, short-lived) construction. The option is utilizing older and historic properties. Older and historic properties provide a disproportionate share of “affordable” housing nationwide, the vast majority of which receive no public incentive, no tax break, no subsidy of any kind.

But nationally that housing is being lost. Every day, 7 days a week, 52 weeks a year for the last 30 years, the United States has lost 530 units of housing built before 1950, 80 percent of it single-family dwellings. “Lost” isn’t the right word. They weren’t lost. While a few disappeared because of fires or hurricanes or tornados, the vast majority were consciously torn down. The crisis of affordable housing in America has been critically exacerbated because we have torn down what was affordable and built what is not affordable for many of our citizens.

What is the difference between “older” housing and “historic” housing? Certainly not every building constructed before 1950 should be considered historic. But from the standpoint of a public policy toward housing, “historic” properties have some degree of protection from demolition -- therefore keeping them in the inventory of available housing. “Older” housing just gets torn down.

Today enlightened cities are reusing their older and historic buildings as the core strategy in addressing the housing crisis. It is not that no building should ever be torn down; rather that demolition should be the last resort not the first option.

Attracting Residents to Washington, D.C.

Every five years or so the cover story in Time or Newsweek will be about the “back to the city movement.” And, indeed, over the last 15 years there has been a significant return to many urban areas, but almost never was it a return to the city in general. In nearly every instance it has been back to the historic neighborhoods of the city.

Let’s look at Washington, D.C. Mayor Anthony Williams has an initiative to add 100,000 to the population of Washington in the next decade. As a city Washington, D.C., lost population in each of the last three decades. But it didn’t lose population from every neighborhood. In fact some neighborhoods grew while the city overall was shrinking. Which neighborhoods? Historic neighborhoods.

During the decade of the 1990s Washington lost 35,000 residents, while on a composite basis Washington’s 25 historic districts added residents. In fact, had the historic districts lost population at the same rate as the rest of the city, the 2000 population of the District of Columbia would have been only 561,896. Conversely had the rest of the city grown at the rate of the historic districts, the 2000 population would have been 621,472. This population gain within historic districts was not limited to the most expensive neighborhoods like Georgetown or Kalorama. The more modest Shaw Historic District and LaDroit Park both had more residents in 2000 than in 1990.

The conclusion should be obvious. When people do choose to move to the city, they move first to the historic neighborhoods of the city.

The District of Columbia will be in competition for those 100,000 residents. Who will the competition be? Primarily the close-in suburban jurisdictions of Virginia and Maryland. Washington will succeed in that competition only if it differentiates itself from those suburban alternatives. The urban quality of Washington and its historic neighborhoods are a central defining feature of that differentiation.

There are very few large parcels of available land upon which major residential development can occur, so the majority of new residents will have to be accommodated within existing neighborhoods. And new residents -- especially those who have the financial means to increase the tax base -- will be moving into existing neighborhoods, and that is “gentrification.”

Lessons for D.C. and Other Cities

There are complex issues regarding neighborhood change taking place today. The magnitude of those issues will only increase as the goal of adding 100,000 residents to Washington, D.C., is achieved. It no longer serves a useful purpose for neighbors to scream the word “gentrification” at each other. It needs to be broadly recognized that there are aspects of this change that are desirable -- reinvestment and economic integration -- and aspects of this change that are undesirable -- human displacement. If Washington is to be a healthy city it will recognize the difference.

Gentrification comes about because Washington, D.C., and other cities are blessed with great neighborhoods -- many of them great historic neighborhoods. The economic description of rapidly rising prices is “too many dollars chasing too few goods.” Simply put the demand for houses in many historic districts is far outstripping the supply. But there are dozens of neighborhoods in cities across the country, hundreds of blocks and thousands of houses, that could meet the test of being a local historic district. The response is not less historic preservation; the response should be more historic neighborhoods identified, protected, and enhanced. Historic preservation should be the key tool for the economic integration of neighborhoods, and a key component in providing affordable housing.

We as preservationists have not overestimated the importance of our historic neighborhoods. In fact we have vastly under-recognized the multiple contributions to healthy cities historic neighborhoods provide. Historic preservation is not the answer to every urban problem, but it is part of the solution to most of them.

The Preservation Leadership Forum of the National Trust for Historic Preservation is a network of preservation leaders — professionals, students, volunteers, activists, experts — who share the latest ideas, information, and advice, and have access to in-depth preservation resources and training.